Monday, July 22, 2019

Russia Now has ‘Capitalism with an Inhuman Face,’ Nikolayev Says

Paul Goble

            Staunton, July 19 – At the end of Soviet times, some talked about creating “socialism with a human face.”. But now, Russia instead has created “capitalism with an inhuman face,” a system in which the worst features of capitalism have been exacerbated and its best minimized or eliminated, Igor Nikolayev says.

            There is simply no other way to characterize economic arrangements in which the rich get richer, the poor poorer, while the economy as a whole seems permanently stuck in stagnation, the Moscow economist says (

            This has happened, Nikolayev argues, because of the nature of the Russian state and its relationship to the economy, a relationship that is defined by the fact that in Russia today, there is very little purely private economic activity and also very little purely state economic activity. Instead, each is a “quasi” phenomenon with private and state elements intermixed.

            That has given rise to “a new form of property, state corporation property,” which is neither state nor private and in which few decisions can be made without the state being involved but in which at least nominally those at the top of these institutions are more concerned with their own interests than they are with the interests of the country as a whole.

            What this means, Nikolayev continues, is that “with us, private property is quasi-private and state property is quasi-state as well,” something that makes discussions about how large the role of the state is in the economy problematic: it is enormous but at the same time not totally in control.

            “The role of the state in the Russian economy is not simply large but very large, and this state, judging from its unsatisfactory economic results concerning the development of the country is not an effective property owner,” Nikolayev says.

            “No one is saying that the state should not play a role in the economy,” he continues, “but if it is so large and the results so poor – the economy almost isn’t growing and real incomes of the population are falling – this means that it is necessary to change something.” And that means it has to make capitalism possible by making private ownership real.

            Many in Russia condemn the liberals, Nikolayev says; but those who do have erected “an economy with the de facto dominance of the state form of property,” something that contradicts Article 35 of the 1993 Russian Constitution and means that Russia now has “capitalism with an inhuman face” because it is not really capitalism at all.

            Nikolayev concludes his commentary with an approving quotation from Aesop’s fables.  “In relation to the state, one should behave as toward fire: not too close so as not to burn but not so far away so as not to freeze.”

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